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BUYING REAL ESTATE – A few useful tips

06 August, 2011 03:34:00 Carlos D. Angulo, Lawyer

As the real estate market starts recovering here, especially on the Pacific Coast, there is a renewed interest from potential buyers, whether local or from abroad, in purchasing a house or condo in sunny Costa Rica. A few tips may be of help to them. First, there are two main classes of real estate ownership in Costa Rica. One is the traditional, privately owned property, where you hold title to your lot or house, plain and simple. The second, more and more frequent in practice, is ownership of a residential unit – be it a house, apartment or lot- inside a condominium development i.e., in a gated, private, administered community. In condominium ownership, you not only own your unit, but are also co-owner of those common premises and shared elements of the condo, such as the pool, garden areas, internal roads, elevators and in general any other asset which is co-owned by the home owners. This also means that you will be levied a fee or assessment to contribute to expenses for the maintenance, repair and administration of these common areas; further, because your unit will be part of a community or condo association, you will need to abide by common regulations which often impose restrictions and limitations on the homeowners to regulate the social interaction in the development. But don’t take me wrong, condominiums bear many advantages, too. Enhanced security, shared costs of common services, and punctual, quality maintenance are just a few worth mentioning. If, on the other hand, you are planning to purchase a piece of undeveloped property on which to build your dream home, you will definitely need to conduct a thorough “due diligence” study on such a lot before you sign your name at the bottom of the purchase deed. Remember, there may be important zoning and/or other legal restrictions, as well as possible technical impediments (lack of available utilities, for example, strikes me as the most common one!) which may jeopardize your investment. Finally, be aware that shoreline or beachfront properties - with a few, rare exceptions - are in fact owned by the Costa Rican government, which may grant long term administrative lease rights to individuals (concessions), but cannot sell any such concessions. So don’t fall for the bargain “assignment of rights” deal that a local may offer you on a secluded beach, since these private agreements are, legally speaking, not worth the paper they are written on.